TIGA positive amid game tax break no-manâ??s-land

Despite the coalition government’s ongoing silence on game industry tax legislation, a speech made by Prime Minister David Cameron has provided encouragement to the UK’s game trade association, TIGA.

Cameron claimed last week that Britain’s economy “is heavily reliant on just a few industries and a few regions”, stating that Britain should be buoyed by a diverse range of sectors and businesses.

Cameron said he wanted to support growing industries, such as “aerospace, pharmaceuticals, high-value manufacturing, hi-tech engineering, low carbon technology. And all the knowledge-based businesses including the creative industries.”

The comments are TIGA’s first ray of hope that the administration will fulfil its election promise of game development tax breaks, a policy which TIGA has rigorously campaigned for during the Labour administration.

Now TIGA is asking the new government to introduce game tax relief during the emergency Budget, set for June 22, in a move it says will allow the UK “to compete on a level playing field against our overseas rivals, increase employment, expand investment and export more, generating further revenues for the Exchequer.”

Former Labour Chancellor Alistair Darling agreed with such a policy, and set aside $90 million for game development tax breaks. But in an unfortunate twist, Labour lost power during the general election before the bill was enacted.

Develop understands that the bill is still in motion – and consultation is set to continue – unless the brakes are put on.

The Lib-Con coalition consists of two parties which, in some form, have previously backed game development tax breaks. The administration has taken the issue off the table, for now, while the priorities of government is set in train.

The Lib Dems recently told Develop it was fully in favour of game tax breaks, and despite not mentioning the policy in its election manifesto, it assured TIGA of its sustained commitment.

The Tories have had a bumpier ride. It has in the past failed to convince the wider industry that it fully supports game tax breaks – as made evident from the failure to produce a promised ‘mini-manifesto’ on the issue – a paper which would have needed approval by the treasury.

Yet TIGA continues its campaign, and Cameron’s speech may reignite the association’s engine following a quiet grace period while the government establishes itself.

“TIGA welcomes the Prime Minister’s commitment to rebalance the UK economy and to support knowledge based businesses, including the creative sectors,” said the association’s CEO Richard Wilson.

“The UK video games industry is precisely one of the sectors which the Government should support as part of a strategy to rebalance the economy. It is a knowledge industry, with 60 per cent of a typical development studio’s workforce qualified to degree level and in many studios this figure rises to 80 per cent.

“Additionally, 40 per cent of development studios work with one or more universities, advising on course content and/or engaged in knowledge transfer.”